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Performance management - one more time

In this debate, don’t join the 'fad' club - figure out what's best for your organization

By Ian Hendry

Every time a group of SCNetwork CHROs get together for a discussion about current trends and issues, the conversation is always interesting and insightful. This is partly because every organization and industry challenge is unique, but also because HR structures and practices are in a different stage of evolution.

Regardless, there are some topics that seem to be universal and always top of mind. One such topic is performance reviews and ratings. It was not surprising that in this small group, 62.5 per cent of the CHROs are thinking about eliminating reviews, but only 12.5 per cent have done so to date. In other words, consistent with numerous articles on the subject, the majority are thinking about it, with many likely sitting on the fence.

I must confess that I have little to add on this topic. We are told managers and employees hate performance reviews. From my experience over many years, this is only partly factual. As an employee myself, and confirmed by many employee focus groups, the exercise is problematic.

Most people DO want to know where they stand. Most people DO want to know how to boost their careers, which aligns to compensation and prestige. Does the thought of the meeting with our boss fill most of us with trepidation? Perhaps, but don’t most employees already know how they have performed? Of course, they do. And if they have gone above and beyond the call of duty, isn’t it reasonable to think that this performance will not go unnoticed and it will be recognized and compensated appropriately?

I understand the neuroscience research that shows employees can be filled with dread. But more often than not, this is because conversations with managers are infrequent, less than candid, provide little evaluative detail, and lack developmental insight. Any and all of these problems may apply here. It is little wonder then that a group of senior executives at a very large employer cheered when told the performance assessment exercise, as they knew it, would be dropped. Cheers tuned to groans when the revised program was introduced.

To state the obvious, it is managers who do not like doing reviews. I like what Vince Molinaro reminds us: “if you want to be a leader, you are signing up to be a developer of people. If you don’t want that accountability… don’t sign up.” It’s pretty basic. The trouble for us in HR is that when we look at the quality of the assessments written, we sometimes cringe from embarrassment. If the documentation is poor, the conversation is presumed to be just as bad.

I totally accept that an 18-page assessment form is total lunacy. It is inefficient, but more critically, it means we spend more time completing the form, than having the face-to-face conversation. And, dare I say it, could there be too many managers who really don’t know the contributions their employees are making on a day-to-day basis?

Lest you think that I am saying that the entire fault lies with redundant forms and inept managers, this is not the case, as reporting structures with 10 to 12 direct reports make life impossible at year-end too. Most of us have come to realize that the focus should be placed on the quality of the conversation with an employee, less on the quality of the form completion.

Gauging that across an organization can be difficult, but employee surveys can provide valuable insights about employee views and/or satisfaction with the process.

Our CHRO discussion centred around much of this, and more, but this leads us to the use of employee ratings. Once again, it may not surprise you that 81 per cent of the group is considering eliminating ratings, whereas only 19 per cent have done so today. The number one reason that companies are thinking about dumping ratings is because of rater bias, and inaccurate feedback. We are back to the domain of the manager/leader/executive, which means they are incompetent and/or ill-equipped to handle this responsibility.

We are told employees rebel against being labelled. We have found from past practice that whatever performance scale we do use, most people are evaluated around the middle and this is safe ground for the manager. Rocking the boat during the year-end review is often the biggest fear. Hence everyone’s frustration with the process can be explained. People who excel are too often pulled back to the middle, and weak performance is not properly addressed either. For those dropping ratings, there is often a “behind-the-scenes” process that is core in succession planning and/or for bonus payouts. One can make the argument that if the conversation with the employee has both a performance and development component of real quality, the ratings need not be public. I would argue that if honesty and candour are real, the ratings become somewhat of an incidental.

So my conclusion is the pretty obvious one that the quality of the leaders in the organization ultimately drives the decision for reviews and ratings. Some companies are genuinely satisfied that reviews and ratings are done well. Performance is graduated and differentiation well- enunciated and explained. Others are placing the emphasis on coaching managers to improve the quality of evaluation and discussion with employees.

When I was much younger, my mother once asked me, “If I told you to put your head in a gas oven, would you do it?” In this debate, don’t join the “fad” club. Consider all of the elements and figure out what is best for your organization.

Ian Hendry

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